Affichage des articles dont le libellé est monetary war. Afficher tous les articles
Affichage des articles dont le libellé est monetary war. Afficher tous les articles


The monetary war in seventy-one seconds

James Rickards has given few days ago a very interesting interview to Mineweb Radio in South Africa.

I consider this as the best summarized description of monetary war (so called 'currency war'), albeit a very short one.
I only disagree with a point : Rickards described 3 phases in the monetary war : 1921-1936 ; 1967-1987 ; 2010-now.
In fact, the current crisis is rampant since 1967. One major event has temporarily covered up the monetary crisis: the strategic partnership between US and China, which has sustained the international role of the US dollar, but without reforming any fundamental weaknesses. The CBGA first gold agreement in 1999 was a significant sign that the monetary crisis, like a dormant virus, was still there.
The US/China monetary partnership has been broken since 2009/10, and this has unveiled a new wave of the monetary crisis.
Here are a few pictures from my Research Pages to illustrate the major trends:

Data serie since 1985

U.S. : Velocity of M2 money stock (lhs; using GDP/M2); 
Velocity using M2 / StLouis Fed non-adjusted monetary base (rhs); 
Data series since 1959


Monetary war : from sovereign debt to sovereign gold

 As I wrote in "Le nerf de la guerre monétaire", behind sovereign debt, there's gold. Because the supposed-to-be-deadly Euro sovereign debt crisis is over, and the Euroland is successfully running towards much stronger integration, a new battlefield is being investigated : "Audit the gold Reserves". 

This is a very tactical game, and here are some recent developments:
 We, Europeans, must not be worried. We believe NY Fed when they say the german gold is there. And even if it weren't NY Fed is good for its replacement.

[This article was first updated 10/28 : add links about statements published 10/25 ; it will be further updated depending on future new important publications or press releases]


The international role of the euro remains unchanged after the last crisis : ECB review

This 11th annual review of "The international role of the euro" presents the main findings of the continued monitoring and analysis conducted by the ECB and the Eurosystem looking at the development, determinants and implications of the use of the euro by non-euro area residents. This review also examines in greater depth issues that have a bearing on the euro’s international role, the global currency order and the international monetary system (Part #1). This analysis is also  presented in the form of four special features (articles #2 to #5).


1. Recent developments in the international use of the euro.
2. Foreigners’ appetite for euro area securities during the sovereign debt crisis.
3. The Chinese dominance hypothesis and the potential emergence of a tripolar global currency system.
4. When did the US dollar overtake the Pound Sterling as the leading international currency? The “old view” versus the “new view”.
5. Was unofficial dollarization / euroisation an amplifier of the global crisis of 2007-09 in emerging economies?
6. Statistical annex.

PDF Version :  1.64 MB (en)
ePUB Version:  10.3 MB (en)

The 4th article, based on work by Chitu, Eichengreen and Mehl, and the 3rd one, based on work by Fratzscher and Mehl, bring new details on a topic familiar to the readers of Conscience Sociale ( How to replace the world trade reference currency ? ) ;  Part 1.3 proposes updated elements to the topic covered on this page : US Dollar (and Euro) as invoicing currency.
The whole review certainly deserves your strong attention.